Labour leader David Shearer has confirmed he will seek the endorsement of his caucus colleagues at an urgent meeting at 4pm tomorrow.

The announcement comes after rival David Cunliffe confirmed he would endorse Shearer for now after being outmanoeuvred over the weekend.

Cunliffe refused to rule out a leadership tilt in February, meaning he is certain to be demoted.

Shearer said he would seek an endorsement under the new rules set by the party conference at the weekend, that requires at least 60 per cent support to avoid a run-off in which party members and union affiliates get a say.

Asked what action Shearer would take if he did not achieve the 60 per cent backing, a spokesman said: "He will not lose the vote."

Shearer said a formal endorsement vote would also still be held in February, in accordance with the new rules approved by party members.

"I'm holding this vote tomorrow to demonstrate that I have the support of my caucus and to put recent speculation to bed.

"It is important that these matters are resolved so that Labour can lift its sights to focus on the serious challenges facing the country, including jobs, education and housing affordability," he said

It is understood Shearer is also contemplating action against two or three other MPs seen as close to Cunliffe.

However, Lianne Dalziel is unlikely to face any action because she is not seen as one of the ring-leaders in camp Cunliffe and she is highly regarded for her work in Christchurch since the earthquake.

Chauvel said today no one had discussed the matter with him.

He said he would be endorsing David Shearer as leader at tomorrow's vote.

Meanwhile Fairfax Media understands Cunliffe lost the support of Su'a William Sio and Rino Tirikatene late on Sunday reducing his firm backing to just seven in the caucus - well shy of the 14 he would need to spark a leadership run-off with Shearer.

CAUCUS CALLED

Senior Whip Chris Hipkins confirmed Shearer had called a meeting so caucus could vote to endorse him as leader of the Labour party.

The vote would be held by secret ballot but the result would be made public.

The meeting came as Cunliffe faced rising anger within the Labour caucus after failing to endorse Shearer's leadership at a tumultuous Labour Party conference at the weekend.

Hipkins today hit out at Cunliffe's ambitions and said his undermining of Labour's collective team effort "makes it very difficult for him to continue in a senior role within [our] team".

"At a time when we should be focused on getting out there holding the National Government to account and selling our policies and our message, David Cunliffe has been working in the shadows to undermine the current leader and prepare for a leadership challenge. That's unacceptable."

"If David Cunliffe wants to challenge for the leadership he should come out of the shadows and get on with it..... it is totally unacceptable to say I'll support David Shearer for now while I work over the summer break to destabilise the leadership and get the numbers to move against him in February.

''If he is going to challenge for the leadership he needs to do it now; this is totally unacceptable what he's doing," Hipkins said.

Earlier today, Shearer was confident he had the numbers to ward off a leadership challenge.

Months of speculation about Shearer's future came to a head at the party's annual conference, with Shearer effectively putting Cunliffe on notice to either "put up or shut up".

Shearer told TVNZ's Breakfast he "absolutely" had the numbers to win the looming leadership vote.

"What we want to be able to do is to put all of this behind us. It's been rumbling on every now and then, it needs to be stopped, finished and we focus on what people want us to focus on.

"That's what we'll do in the coming days, I'm not going to say when."

Cunliffe said he had contacted Shearer last night to offer his support - but refused to extend that commitment to the February vote.

"I don't see any need for an earlier vote but if there is one he'll have my support and I wouldn't be surprised if it's unanimous," he said earlier today.

He said he was impressed with Shearer's speech at the weekend and agreed with the policy direction announced.

"I've given David Shearer an assurance of my support," he told Radio New Zealand.

"I can't give you a commitment for a future vote that hasn't yet occurred," he said of the February vote.

The party changed the way it votes on the leadership over the weekend.

Shearer said there was a lot of discussion about the changes but they were what the party membership wanted.

"The main thing is they decided, I live with it."

The changes mean the leader would have to get 60 per cent support at the February vote.

Cunliffe refused to say whether he was holding off till then for the lower threshold.

KEY: I'LL TREAT CUNLIFFE AND SHEARER WITH RESPECT

Prime Minister John Key says divisions within the party were a "really bad news story for Labour".

"Let's face it the Labour party can't even run a conference, how on earth could they run the country?'' Key said today.

"What they are demonstrating is they fundamentally do not like each other ... and a lot of New Zealanders don't like what they are doing.''

Key wouldn't say who was the most formidable opponent of Shearer and Cunliffe - but said he would treat both with respect.

''Whoever is left standing is going to have a warring faction buried deep within their own party.''

He was not impressed with a weekend promise by Labour to provide affordable housing over a decade.

"It's not fleshed out properly, it would cost a hell of a lot more that I can see, than what they are saying ... at the end of the day if it was that simple there's plenty of private sector people that could get a billion and a half dollars and develop such a big programme."

NEW POLICY ANNOUNCED

In his speech yesterday, Shearer outlined promised reforms to economic policy, including a capital gains tax and changes to allow the Reserve Bank to target a lower exchange rate, and plans to launch the biggest house-building programme in 50 years.

It would put 100,000 families into new, affordable homes within 10 years.

Landlords would be forced to bring properties up to minimum standards of insulation and efficient heating and Labour would make it easier to get consents for lower-cost houses.

"I won't stand by and watch families, and particularly children, live in cold, damp and mouldy homes where their health and future suffers," he said.

The Kiwibuild programme would add 10,000 houses a year by the end of Labour's first term in office, generating an estimated $2 billion in annual economic growth and provide 2000 apprenticeships.

A kickstart of up to $1.5b, funded by borrowing, would be rolled over as houses were sold to first-home buyers. Because it was funded from capital expenditure, it would not affect the path back to surplus, Shearer said.

CHALLENGERS NEED THE NUMBERS

How a Labour leadership vote is triggered:

Under the new rules a leadership run-off is triggered if 40 per cent of the caucus do not vote for current leader Shearer.

That means Cunliffe needs his vote and 13 others out of the 34 Labour MPs.

If he gets those 14 votes the leadership is then decided by a vote of the whole party where 40 per cent of the votes are cast by MPs, 40 per cent by members and 20 per cent by affiliated unions.

How the numbers stack up:

The Shearer camp believes it has 23 votes sewn up, but in a leadership race it is notoriously difficult to be sure. If they are right the challenge will be easily repulsed.